Samsung has secured a deal to manufacture Qualcomm’s new mobile application processor for 5G smartphones, the latest in a series of high-profile deals for its chip-making business.
Sources said on Sept. 13 that the deal, estimated at close to 1 trillion won ($844 million), marks the first time Samsung has clinched an order to produce all of Qualcomm’s newest chips. Currently, the Korean tech giant makes several 5G chipsets for Qualcomm, using its 8-nanometer process.
According to the semiconductor industry, Samsung will make the 5G chipsets, known as the Snapdragon 875, using its cutting-edge 5-nanometer technology. The latest processor of Qualcomm, set to be rolled out in December, will be used in high-end 5G smartphones made by Samsung and Chinese handset-makers Xiaomi and Oppo.
Industry watchers said the contract is significant in that Samsung beat market leader Taiwan Semiconductor Manufacturing Co. (TSMC) to win the order, signaling Samsung’s technological prowess and its price-competitiveness. Samsung and TSMC are the only chipmakers that can mass-produce chips with 5 nm technology.
The deal follows some huge chip supply agreements Samsung secured from other big-name players in recent weeks.
Earlier this month, Samsung has clinched a deal to fabricate Nvidia’s new RTX 30 series gaming processing chips, using its 8 nm chipmaking process node. Last month, the company said it is manufacturing IBM’s POWER10 Processor, using its 7 nm technology.
Samsung is also known to be in negotiations to make advanced chips for Intel as the Korean company aims to boost its presence in the global foundry business.
Analysts said the deal is expected to give Samsung the momentum needed to narrow the gap with TSMC.